The following essay will analyze Netflix Company’s social commerce strategy. It includes the definition of social commerce, company history, social commerce strategy that the company is engaging, the effect of social commerce for the company and measuring social commerce success of the company. Below, brief definition of social commerce and the company history.
Social Commerce
The increased interest of social media usage has led numbers of company and business to provide new experiences for their customer to leverage media platforms to make more efficient and effective purchases (Rad, 2010). In addition, the emergences of Web 2.0 technologies are dramatically changing the web collaboration concepts, which made the web more social and interconnected. The aforementioned phenomenon is called “social commerce”. It is a subset of electronic commerce, which utilize social media, or online media that support interaction and user contributions to enhance the online purchase experience.
Social commerce represents promoting opportunities that combine shopping experience and social networking activities through social media. There are many advantages of using social commerce for businesses or companies. It can greatly increase company website’s activity and thereby increase their sales, engage more with its customers, and create a new business model. As for customers, social commerce can help to enhance customer journey of purchasing, such as discovery, selection and referral of the product without spending a lot of money.
Netflix
Netflix was established by Marc Randolph and Reed Hastings in 1997 in California. Initially, the company offered a DVD-by-mail service for a monthly, flat rate subscription fee. Videos were sen...
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...rhaps, its success story is not that different from Spotify?
Works Cited
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HuffingtonPost. (2013, 3 13). Netflix Syncs With Facebook (So Everyone Will Learn You Power-Watch 'Toddlers And Tiaras'). Retrieved 3 7, 2014, from http://www.huffingtonpost.com/2013/03/13/netflix-facebook-integration_n_2866775.html
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Netflix. (2014). Using Social Features on Netflix . Retrieved 3 7, 2014, from https://help.netflix.com/en/node/464
A major strength that Netflix has is their ability to push for such innovation. They have reached new lengths since their start in 1997. From in-mail DVDs, to streaming media on smartphones and tablets, it’s unbelievable to witness this in the making. I think the world is a little shocked on the technological advances of Netflix. What they have done so far is spectacular and it is all because of innovation. New ideas and new strategies developed over the last fifteen years has lead Netflix to where they currently stand today. They currently have a subscriber base of over 700, 000, offering thousands of titles on many different devices. This was made possible because of their ability to innovate and strive for new technological advances. I consider Netflix a very brilliant company. Their strengths are very clear, but this isn’t to say that they have no weaknesses. Netflix has far more competitors now, than they had 15 years ago. I would say that their biggest weakness is not offering enough newer content. Some of their competitors such as Hulu, offer a ridiculous amount of new content. Netflix seems to have a large amount of titles, but majority of these titles are older titles. They need to offer newer titles more often than less. With the company advancing and technology on the rise, the younger population aren’t into the older titles. The younger population now take up a good chunk of the customer base. Netflix must
...ble debt management by having the ability to pay its interest obligations easily. All four of these ratios show us that Netflix is in a good position to service both their long and short term debt obligations, and that they have kept their debt load low and under control.
Netflix is one of the most successful companies in the 21st Century, they have changed the entertainment business is such a profound way that it can never be the same again. It has many utopian effect and interpersonal Netflix brings so much value to the user that it has been set apart in a new category. It delivers to the user any movie or TV show they could ever want at the click of a button, they give more option for entertainment then every before offered at a price that cannot be beaten. Netflix’s extremely inexpensive costs along with their plethora of option blows away all competition and without a doubt makes it the best interpersonal option for all consumers. Netflix is an
A critical SWOT analysis of Netflix’s social media techniques clearly shows they are ahead of the game and not backing down from rising competitors like YouTube which is gaining viewers by increasing the amount of online content.
§ There are a large number of substitute products. Netflix is in the business of providing personal entertainment at an affordable cost. Since any other form of entertainment is considered a substitute, Netflix?s industry is in direct competition with all other forms of entertainment, whether it be reading, physical exercise, regular television, etc. If trends in popular culture move away from those related to movies, revenues may be affected.
Netflix utilizes a number of different advertising methods. Netflix created a coupon in the form of an enlarged movie ticket offering a free month of service. These “movie tickets” are given out at cash registers at all Best Buy stores and are included in packing boxes of most of the major DVD player manufacturers (Sony, Philips, Toshiba, Panasonic, RCA, etc.). Best Buy’s website also has a link directly to Netflix which is under the “DVD rental service” drop down menu. Each DVD mailer sleeve from Netflix includes a tear off “tell a friend” certificate with a promotion code that provides the bearer with a free month of service. At one time, Netflix sold banner ads on their websites. However, they abandoned this strategy after three months because the revenue stream was not sufficient to cover the cost of maintaining the ads. Netflix also has an aggressive affiliate program. The affiliate program encourages other websites to provide links to Netflix and offers a referral fee for linked new members at a range of $9-$12 per member. This fee is dependent upon the number of referrals provided in a month. If a site is successful at delivering greater than 200 new customers in a month, the referral fee is negotiable, up to $30 per new customer. Netflix is a straightforward company. It rents DVDs via the Internet and sends them to you through the U.S. Postal Service. For a flat fee of $19.95 a month, you can build a list of movies at the Netflix.com Web site that you want sent to your home. The company sends you the first three along with prepaid return envelopes. When you're ready to send them back, you put them in the return envelopes and drop them into any mailbox. The minute the return is processed, the next one, two, or three DVDs are on their way. Depending on where you live, the turnaround time is two to five days.
The idea inspired Reed Hastings and Marc Randolph, and then they founded Netflix in Scotts Valley, California in 1997 (Netflix, 2014). The company comes into play by developing a subscription-based streaming platform for movies and television shows. Unlike the traditional movie rental businesses such as Blockbuster and Redbox, Netflix’s innovation offers service via Internet, and it does not have any physical stores but instead delivers DVDs through postal mail in the U.S. Since then, Netflix has become the world’s leading internet television network with constant growth of customers to over 48 millions members in more than 40 countries in the North America, Europe, and the Latin America (Netflix, 2014). In this analysis, the main focus is examining the current market environment for Netflix. It identifies the type of market structure that Netflix is currently competing. The analysis also expands on the competitions, product differentiation, pricing strategy, and measuring the level of easy entry-and-exit.
Reed Hastings, co-founder of Netflix headquartered in Los Gatos, CA, began the company’s operations in 1997 after receiving an enormous late charge from a movie rental he returned long overdue. However, Hastings had the desire to be different than traditional movie outlets; whereas, customers had to drive to the location, pay a certain amount for each movie they rented, and were given a deadline in which to return the movie. Instead of using a method established by other video markets “to attract customers to a retail location, Netflix offered home delivery of DVDs through the mail” which eventually led to a booming business towards streaming forms of entertainment (Shih, Kaufman, & Spinola, 2009, p. 3). Today, Netflix exists along with several competitors; however, offers the most streaming content available for viewing, and continues to grow its subscriber base both domestically and globally. Although, direct and indirect competitors, acquisition costs, and several barriers present a financial threat for Netflix, the company has managed to grow with the acclamation of partnerships, expand to international territories, and vastly increase its price in shares of stock.
Video Rental and Streaming has partly been of the most significant avenues of the general home entertainment industry in the United States for many years. It promotes constructive development through various channels such as Information Technology, Public Multimedia and it also has a huge impact on people’s lives and their entertainment on demand. One of the best companies which provide this high-advanced service is Netflix, Inc (Netflix). It was incorporated on August 29th in 1997 in California by Reed Hastings & Marc Randolph; listed on NASDAQ as NFLX in 2002. Netflix is the world’s largest Internet subscription service streaming television shows and movies with over 40 million members in 40 countries (Netflix, 2013).
With the invention and development of the Internet, communication has changed in to a revolutionized platform. The Internet has evolved from a means to facilitate data, to a stage of public communication through the use of social media. Social media has affected every aspect of interaction from personal lives to the business world. The business world however, has been especially impacted by the application of social media. Social media has opened up a plethora of opportunities for businesses to advertise, promote and market themselves to consumers. Social media “is one of the fastest growing and most promising strategies a business can employ to boost sales and conversions” (Adobe). As social media continues to grow as a marketing tool, more and more companies have incorporated social media into their daily business activity for brand awareness, target market reach, business expansion and customer interaction.
1. What is the difference between a. and a. Briefly describe each of the four major challenges that Netflix faces. Which challenge is the easiest to address? Why do you need to be a member? The four challenges faced by Netflix are described below.
Social computing refers to the intersection of social behavior and computational systems. It is the collaborative and interactive aspect of online behavior of different people communicating together- not in isolation as in one on one chat. Social computing in an organization can empower and motivate employees and as a result create benefits for the business. For example the use of customer relationship management, enterprise resource planning systems among others. Therefore businesses can use social computing to get closer and intimate with their customers, suppliers and hence promote their brands at a lesser cost. Social computing enhances customer relationship management because it allows a business to follow public opinion its brand and respond quickly to customer issues and this increase customer satisfaction and loyalty as well as placing the firm in a better place as far as competition is concerned because of proper customer service delivery social computing elements include wikis, blogs, twitter and instant messaging.
Social media marketing is a new trend of marketing where different Businesses have taken to social media sites to market and promote old and existing products and brands or create more awareness of their new products. Facebook and Twitter are the two most well known sites where firms market and promote themselves. Over one billion users worldwide use both sites everyday; from averages Joe’s to famous celebrities. Such is the power of each social media site that one post can make or break you.
Social media is a form of online communication channels devoted to society input, intercommunication, and cooperation. In social media, people can talk and interact without restriction, exchange and debate information with each other about their lives by using many different combinations of the words, personal multimedia, photos, and videos. Also, in social media, individulsa and groups can create, edit, comment on, and engage in personal conversations. There are numerous types of social media, for example, wikis, blogs, social network site, micro blogging services, and sites sharing media. At the beginning, social media was limited to a few networks sites, for instance, Bulletin Board System that allows people to communicate with each other and post a comment. Today, social media has transformed from ineffective sites to more useful and effective websites, for example, Facebook, and MySpace. Some companies are using social media to achieve their goals which is attracting more customers to company website. Three advantages of using social media in business are: raising brand consciousness, building customer relationships, and increasing performance measurements.
Social media avenues are a new, upcoming, and popular way to advertise for businesses and for people to connect to each other. Alexis Ohanian once said that "Being effective at social media, whether for business or personal use, means capturing people who have short attention spans. They 're only a click away from a picture of a funny cat, so you have to make your thing more compelling than that cat. And that can be a high bar." (Ohanian) Powerful usage of social media can have a big impact.